Operations Control

(OCC)
 Agenda
 0900 - 0930 Introductions and Opening Remarks
 0930 – 1015 Operations Planning
 1015 – 1045 Break
 1045 – 1215 Operations Control
 1215 – 1330 Lunch
 1330 – 1500 Operations Cost Management
Cost of Delay
 1500 – 1530 Break
 1530 – 1630 Operations Management - exercise
 1630 – 1645 Operations Cost Assessment – explanation
 1645 – 1700 Summary – Key Takeaways
 1700 Closing Remarks – ACC Update Information

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 Airline Operations Control
 No airline schedule operates as planned

 All airlines have some form of daily operations

management process

 But, many do not fully realize the service

improvement capability and cost management
potential of a pro-active, fully integrated,
collaborative, Operations “Control” process

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What is Operations Control ???
 Corporate business unit(s) or operational department(s) tasked
with managing & coordinating execution of daily schedule as
planned
 Varied names and functions – OCC, SOC, IOCC, Flight
Operations, Dispatch, Maintenance Control
 Process and personnel responsible to manage real-time
operational decisions – for today, we’ll use OCC

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Role and Responsibilities
 Primary OCC mission is
 monitor
 performance
 anticipate Impact of  service
 manage IRROPs on
 cost
 minimize

 Pro-actively manage impact of unplanned changes to schedule

 provide Quality Service to the maximum number of passengers
 direct most Cost Effective plan to return to the published schedule

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Where to begin ?
 Organization and Decision Process
should include
 Representation for every
department or function
 which can impact,
 or will be impacted by
 an OCC decision concerning
the operation of the flight

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Result: focus on customer and profit

1970s – 80s 1990s – 00s 2000s – today

Incident Focus System Focus Profit Focus
– Routine incident – Planning for – Integrated cost
FOCUS

recovery – fire-fighting upcoming events planning

– Zero-sum decision – Balance maintenance – Customer impact
making for operation & operational needs central to decisions
or maintenance
– Coordinated – Informed analytical
PROCESS

– Silo-based decision- operational decisions decisions, planning

making – Innovation,
– Problem-solving
– Blame culture experimentation
culture
RESULT

– Department metrics – Joint metrics – – Continuous

only – results in improves system improvement
mixed performance performance

“What happened” “What will happen”

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Airline Operations Control Today
 evolving to a Collaborative Operational Decision
Team approach for many airlines

 Increased emphasis on
 Customer Impact
 Cost Control
 Revenue Retention
in “Operational” Decision Process

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As
small
as

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 Emergency Integrated Ops Control Center
Response
Notam & OCC Irregular OPS
flight dispatch
nav data Manager
Crew Scheduling
slot control
A/C
assignment

ATC coordinator

maintenance
control
station control

passenger control
cargo control
Load Planning.
 How does Operations Control relate to
Cost Management ???
 Every day is an Irregular Operation
 No airline schedule operates as planned
 Controlling the magnitude, scope, and impact of each irregular
operation is the primary role of the OCC
 Anticipation and pro-active management are essential
 How well each disruption to schedule is managed will determine
overall operational, service, & financial performance of the airline

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Important OCC Role - Crisis Management
 In a crisis, it is essential for management
to retain absolute control of “In the digital age
Operational Response Records/Data you have less time
Customer Communication Media Response than ever before to
 Maintaining control of situation requires respond to a crisis –
locking down a single truth immediately 24 hours has been
 Passenger manifest reduced to 24
 Crew manifest, qualification and training seconds”
 Aircraft and associated maintenance history
 Corporate communication
 Customers and regulators expect immediate information & news ---
integrated operations information and control become a necessity

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 KLM OCC Video Presentation

 A 12 minute presentation created by KLM a pioneer in

developing modern airline Operations Control structure and
processes

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 OCC Operational Components
 Operations Managers
 System
 Regional
 Fleet
 Dispatch
 Flight Planning
 Load Planning
 Flight Following
 Meteorology
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 Maintenance
 Maintenance Control
 Aircraft Routing
 Technical Specialists
 AOG
 Crew
 Crew Tracking
 Crew Scheduling
 Airport Operations
 Hub/Downline Stations
25-27 August 2014
 OCC Service Components
 Customer
 Passenger Service
 Reservations
 Financial
 Revenue Control
 Related
 Cargo
 Hoteling/Transportation

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 OCC Support Components
 Operational Coordination
 Airport Management Liaison
 Traffic Control – Airport/ATC
 Operational Liaison
 Flight – Chief Pilot
 In-Flight – Base Representatives
 Operational Support
 Security
 Safety
 Data Management and Analysis –Delay, Cost, etc

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 Operations Control - Authority
 Which department is responsible for Operations Control in
your airline ???
 Operational Control Authority
 Duty Director must have full operational decision authority
 Personnel report to their departments, but work for OCC
Director while on duty in OCC
 Ideally, a separate reporting department (similar to Safety)

OCC must have operational decision autonomy

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 Operations Management Transition
 The OCC and its many participants must have real authority to
make and implement operational decisions
 Must transition from department-focused decision-making to
company-focused decision-making
 The OCC must prove the value of its information and decisions
to earn credibility and exercise appropriate influence

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Collaborative Decision Process
 Functional Co-location  Increased Communication
 Personnel interaction =  Improved situational awareness
 Management Interaction  Effective decision integration

“We couldn’t do our job if we weren’t sitting next to each

other”

“Integration created shared accountability for operational

performance and greater passenger focus”

“Everybody adopted airline performance (vs. department) as

the key metric”

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 IRROP Cost Management
 To tactically manage daily operations and make correct business
decisions, the OCC needs good, timely, accessible information
 Resource Availability – Aircraft, Crew, Support
 IRROP Cost
 Operational – crew, maintenance, manpower, services
 Passenger – potential for revenue loss, interrupted trip expenses
 Service impact – customer, regulatory, Good Will
 Revenue and Reservations
 total $ onboard, booking class, market considerations
 re-accommodation options, projected length of delay to destination
 special circumstances (ex: high school band, cruise connection)

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Optimal Operations Control
 A high-functioning OCC process is based on
 Fully Integrated, multi-function, cross-divisional team
 Collaborative team-based decisions
 Proactive approach to manage impact of irregular operations

 Information/Communication
 Comprehensive, real-time, dynamic (including revenue and cost)
to enable and enact balanced decisions
 Minimize decision time, re-decisions, uninformed decisions
 Maintain detailed records and experience data to support
appropriate adjustments to future operations and schedules

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 OCC IRROP Decision Tree
 Do we have an aircraft
 Do we have a crew
 What happens to the passengers
 What happens to the revenue
 How much does it cost (immediate / direct)
 Are there any special circumstances
 How and how long will this decision impact airline
 What are the associated / future / indirect costs
 Do I have alternatives (fuel vs. time vs. delay cost)

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IRROP Passenger Considerations
 How many passengers could be impacted
 are there special accommodation passengers onboard
 When is our next available flight for the passengers – or on OAL
 how long will each passenger be delayed in reaching destination
 How disruptive is the reaccomodation for the passenger
 overnight, long airport delay, multiple stops, missed connection
 Are there adequate passenger & crew accommodations available
 What type of market are we dealing with
 What is the recent history in this market

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 IRROP Cost Considerations
 Revenue – to be retained, lost
 Crew - lost time, premium pay, accommodations
 Maintenance - missed service opportunities, wasted resources
 Labor – mechanic, ground service agent overtime
 Passenger Servicing Cost
 Interrupted Trip Expense - hotel, meals, transportation,
denied boarding compensation, Frequent Flyer awards
 Any regulatory penalty or cost of delay
 Cost of passenger good will

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 IRROPS Cost Distribution
2%

10%
Revenue/Psgr
12% Crew
40%
Fuel
Labor/OT
12%
Maintenance
24% Other

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“What should the OCC contribute to an airline ? ”
 To support positive business results, an effective OCC must
 Manage the Operation of the airline schedule as planned
 Minimize the Impact of schedule disruptions on the airline
 provide Quality Service to the maximum number of passengers
 maximize Revenue Retention
 direct most Cost Effective plan to return to planned schedule
 Every OCC decision, action, or inaction will significantly impact
the resulting Company performance, including
 Operational
 Service
 and, Financial (Cost/Revenue)

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 Planning and Operations Control
Operations Cost Management
 Proper Planning facilitates Schedule Reliability and
Cost Efficiency
 Schedule Reliability establishes foundation for efficient
resource management and cost control
 Schedule Reliability enables OCC management to
 minimize IRROP service disruption & system operational stress
 implement schedule & service recovery with minimal time & cost
 maximize service delivery to maximum number of customers
 retain revenue

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Integrated Operations Management
Operations Planning
An integrated process for
planning and balancing:
1. Schedule components: location,
frequency, timing, aircraft type
2. Operational requirements: flight
time, ground time, crew time,
maintenance program
3. Resource requirements: aircraft,
GSE inventory, manpower,
facilities, contract services
Airline Cost Conference
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Operations Management
An integrated process for
managing day-to day operations:
1. Bring together experienced scheduling,
operational, maintenance, customer
service, and revenue control people
2. Enable staff to work together to
innovate processes organically
3. Design and/or improve tools to enable
next generation innovation
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Thank you!